Builder wants maintenance money before possession? Check these rules first

Fresh updates from the financial markets indicate that A builder's demand for maintenance charges can come as a surprise when a homebuyer is already arranging money for stamp duty, registration and other possession-related expenses. In many projects, developers collect maintenance in advance for a set period, often until the residents' association takes over day-to-day upkeep.

The key question is not simply whether maintenance can be collected before you receive the keys. It is whether the demand is supported by the agreement and applicable state RERA rules, and whether the project has touched the stage at which possession can lawfully be offered.

RERA does not prescribe one nationwide maintenance rate or a single formula for advance maintenance. The amount, period and collection mechanism can as a result vary by project and state. The agreement for sale should be the first document to check.

A buyer should ask for a written breakup showing the maintenance rate, period for which it is being collected, services covered and whether the amount is a recurring charge or an advance deposit. Additionally check for separate demands such as a corpus fund, sinking fund or facility-management charges.

As noted by a leading news channel in 2023 that some developers in Mumbai were collecting advance common-area maintenance for 12 to 24 months. Such practices are not, by themselves, proof that every demand is payable in every project.

The occupation certificate matters

Possession under RERA is linked to the relevant occupation or completion approvals. The Ministry of Housing and Urban Affairs' RERA FAQs state that allottees have the right to timely possession and that the promoter is responsible for complying with the Act's requirements.

This becomes particularly important when a builder asks for maintenance while the project or relevant phase does not yet have the required occupancy approval. A buyer should not assume that a letter offering access for interiors is the same as lawful possession.

There have been state-level RERA orders dealing with this offering. In 2023, Karnataka RERA held in an interim matter that the developer remained responsible for maintaining common areas until the occupation certificate was obtained and an association of allottees was formed. Ask where your money will go

Advance maintenance is generally intended to pay for services such as security, cleaning, lifts, landscaping and upkeep of common areas until the association or society takes over. But buyers should ask how the money will be accounted for and when the responsibility will shift.

If a large lump sum is being demanded, ask for the calculation in writing rather than relying on a sales representative's verbal explanation. Keep the demand letter, agreement, payment receipts and correspondence.

Do not simply refuse every maintenance demand

A buyer should additionally avoid taking the opposite approach and assuming that no maintenance is payable until the physical keys are handed over. If a valid offer of possession has been made after the required approvals and the agreement clearly provides for maintenance from that stage, the liability may arise even if the buyer delays taking possession.

If the demand appears inconsistent with the agreement or applicable RERA rules, raise a written objection and seek clarification from the builder. If the dispute is not resolved, the buyer can approach the relevant state RERA authority.

Before paying, compare the demand with the agreement, verify the project's approval status and ask for a detailed calculation. A maintenance bill may be legitimate, but the buyer should know exactly what period and services they are paying for.